Procrastination: An enemy of business

This week we shall continue our discussion on how some employers may contribute to high levels of unemployment in Botswana.

A major challenge facing almost all new businesses is lack of access to affordable finance since the rate of interest on a loan may be too high, or the period over which the loan is to be repaid is too short. Although business owners cannot control such matters, their past actions may also be responsible for their financial problems. For example, you may wish to start up a business but realise that you do not have enough cash in the bank even though you have now retired from full time work.

And you wonder where that nest egg is that could have been used to start up the business that you had always dreamt of. However, during your working life you spent your earnings on fancy cars, luxury foreign trips, plush houses in Phakalane… So, the message is clear – we need to save money if we wish to start up, run and grow a business!

Some employers want to ‘ think big’ and to see their company becoming a major player in the market place overnight – as quickly as possible. But growing too quickly can be a recipe for disaster, especially if you are venturing into an area in which you have little or no experience. If you wish to become a successful crop farmer, it is best to start off small by growing, say, tomatoes, in a few small plots. Now if you fail to reap a good crop and make a loss, then you will have lost only a small sum of money and still keep your bank balance in the black! You will then have to find out the reason why the yields were so low. If you discover that you did not add enough fertiliser to the soil, then next time you may increase the amount.

With this in mind, you might wish now to add a few more plots under tomato.

This time, you may see that the plants are growing faster as a result of having added more fertiliser in the soil. But after a few months you may see that some of the plants are changing colour, wilting, and producing very few tomatoes. Again, you have lost money but it’s still not a disaster. To prevent the problem from happening again, you conduct some research into the cause of the problem and discover that the plants had succumbed to a certain disease, and to prevent it from attacking your tomatoes again, you need to buy some pesticides. By this time, you have realised that growing tomatoes, like any other business, is a steep learning curve and the skills necessary to grow them successfully cannot be acquired overnight. You have learnt from your mistakes! Once you have gained experience in growing tomatoes over a few years, you will now be in a position to expand production big time and be successful. The sky’s the limit!

There is nothing wrong in ‘ thinking big’ but you must realise that it will take time! And that time will be time well spent – patience will be rewarded.

Making a profit is one major aim of any business. But even if a wellestablished company makes good profits it’s still no guarantee that it will survive in the long run. One reason for this is that the business owner may decide to squander the money on status symbols such as fast cars and top of the range 4x4s, a good house in Phakalane, Gaborone, luxury holidays abroad… In other words, on personal things that do not benefit the company.

And then one day he receives his company’s bank statement – the account is overdrawn and now in the red! And to cut costs and get back into the black, he might retrench some of his employees. By cutting out such wasteful expenditure, business owners will more likely make profits and so be able to plough them back into the business and so expand its operations and create more jobs, for example, by opening new branches or diversifying its products.

Procrastination is an enemy of any business. Put simply, this is simply to keep on delaying something that must be done, often because it is unpleasant, too demanding, or boring. And it can be costly! Business owners need to carry out things on time; there are no excuses for putting off jobs indefinitely – the more we do so, then the less likely that they will be done! For example, a farmer may decide to plant a summer crop, tomatoes, in early September.

But if he does not buy tomato seeds and seed trays before that time, then planting will be delayed which means that he will now be forced to postpone harvesting the crop. This means that the harvesting period will now be shorter since his plants may be seriously affected by frost once the following winter begins. And that means less money in the bank!

Now he may know that his tomatoes may be attacked by certain pests and he has bought the relevant pesticides in good time. So far, so good! But in November he first sees the pests on his plants but fails to spray the pesticide then. Instead, he sprays a month later but by that time the pests have ravaged his crop and many of the plants have died which will later result in vastly reduced yields.

So, to avoid such pitfalls, the farmer should draw up an annual plan which will show what activities are to be carried out, and when. Such a plan, for example, could show sowing of rape in April, transplanting of rape seedlings in May and harvesting rape from July to September.

And all businesses should pay their bills on time. Delays in paying utility bills, such as water and power, may seriously disrupt operations and may cause a shutdown. And if you delay on settling bills for inputs from your suppliers, then those companies may now refuse to do business with you again! There is no excuse. Put simply, financial discipline is a must!

Before setting up a company, an entrepreneur must first advertise for people to fill the available positions in the company with suitable well- qualified people. Getting the right personnel at the start is vital to success. An employer might think that he will cut costs by recruiting less experienced people for the key posts in the company. However, such a decision may soon backfire on him and the company may before long collapse around him!

Let us assume that you wish to set up a publishing company for the purpose of publishing a magazine. In such a company, there are key personnel such as Chief Editor, Head of Graphics, Head of Production and Sales Manager. Now each of these people is responsible for running a particular department in the company and so will supervise those employees who are under them. If these key personnel have a lot of past experience in their jobs, then the company is more likely to get off to a good start and so make money. However, such people do not come cheap, but the extra expense in employing them will pay dividends in the long run.

Then as the company becomes established, people with less experience can be hired. It is like building a house where the first job that the builder does is to lay the foundation. Now if he uses unsuitable materials the foundation may, at first, look solid, but in time the house later built on it may collapse.

Even when a company is up and running, employers must always be on the lookout for ways of reducing their bills, especially in the early days when financial resources may be limited. For a small business, in particular, there may be no need to rent a large office in a modern, prestigious commerce or business park when the same work can comfortably be done at no charge in a room at the employer’s house. And these days of the COVID- 19 pandemic have shown that it is possible to work effectively from home and meetings can be held virtually and using Skype and videoconferencing. Also, when buying inputs, it pays to shop around for the cheapest deals! And buying goods in bulk can also save money.